Breaking: The Unthinkable…Delta and Korean Air Form Joint Venture

Someone is happy today. Actually very many people are extremely happy. And one of them is definitely Joey. Because what we thought was impossible and have previously posted about has happened.

Hell hath frozen over.

The Scoop:

Delta Airlines (DL) and Korean Air (KE) have announced that they are initiating a joint venture (JV) for flights across the Pacific in a bid to meet increasing competition and demand in the highly competitive market between the United States and Asia. United and Japan’s ANA as well as American and Japan Airlines already have such agreements in place. It was always a head scratcher as to why Delta hadn’t taken the same steps with their respective alliance partner in Korean Air, instead opting to cozy up to the much inferior China Eastern (MU) and China Southern (CZ), both also members of SkyTeam.

But the scratching is over, and Delta has finally seen the light.

Bloomberg broke the story and is reporting:

Delta Air Lines Inc. and Korean Air Lines Co. agreed to form a joint venture to share costs and revenue on flights across the Pacific in a bid to lure customers with more options amid intense competition.

The two airlines, both founding members of the SkyTeam alliance, signed a memorandum of understanding to coordinate on schedules for a combined network serving more than 370 destinations in the Americas and Asia, the carriers said in a statement Wednesday.

Ed Bastian, Delta’s CEO, released this statement on the deal:

This agreement deepens our longstanding partnership with Korean Air and will provide the global access and seamless service our customers demand

So it seems as though the new deal and JV will extend well beyond trans-Pacific services and will also hit Korean Air’s extensive Asian network that extends from Auckland to Ulan Batar and Mumbai to Sendai.

This agreement will go far beyond the current very limited codeshare services the two airlines are currently under – expect many more more Korean flights with a Delta code tagged on, and more elite earning and reconigtion reciprocated on both carriers.

This marks a distinct departure from the otherwise frosty relationship that has been historically shared between Delta and Korean, and a development that many will embrace.

We’ll keep you posted as more details emerge of this new tie up, but from what we’re initially seeing it’s going to be comprehensive and perhaps a game changer for some.

Love trumps hate – SkyTeam airlines Korean Air and Delta have decided to make good and embark upon a comprehensive joint venture partnership. Image Credit: Wikimedia Commons

The Takeaway:

We can’t really understate just how massive this is for US based SkyTeam elites and members. Up until now your main options for travel to Asia if you wanted any semblance of earning or retaining status on DL was to be on Delta metal or to be on the bog under standard China Eastern or China Southern, with Vietnam Airlines or China Airlines as the outliers. The one world class airline of the region – Korean Air – mysteriously frozen out.

Not so anymore, and the KE extensive network and award winning service is now available to Delta customers. Whatever the rift between the two airlines was has now been repaired, it would seem.

Delta has always been strong in continental Europe through Air France, KLM and Alitalia but seemed to shoot themselves in the foot in Asia by choosing to transfer their hub from Tokyo Narita (inherited from their merger with Northwest) to Shanghai and Guangzhou. Both hubs were objectively and widely seen as vastly inferior to Seoul’s Incheon Airport, a multiple award winning facility with a much better home airline than MU or CZ. We’re not even getting into the logistical constraints of flying in China with military air traffic control constraints and logistical hurdles at airports.

Perhaps with the announcement of the new joint venture might pave the way for even more increased cooperation between the two airlines – perhaps Delta might reconsider their ill advised move to Shanghai from Tokyo as their new Asian hub? Seoul makes perfect sense and connects perfectly with Korean’s vast Asian network that even serves secondary cities such as Siem Reap in Cambodia, Cebu in the Philippines, Vientiane in Laos, Krabi in Thailand and Nha Trang in Vietnam. Delta SkyTeam members also now have added options to get to exotic beach destinations such as Male in the Maldives and Nadi in Fiji through a nice stop over in Seoul.

The opportunities are endless.

And yes, we understand China is an important market for any airline, hence DL’s pivot to MU and CZ. But Korean Air alone serves 28 destinations in the country so connectivity from Seoul is not an issue. Not to mention the 12 destinations the airline flies to in Japan, another major market.

Joey might be able to communicate better just how happy Delta SkyTeamers should be about this, but DL has further solified their already strong presence in Asia and have finally put the odd unexplained animosity with Korean behind them.

Does this make Delta the main American player in the region, beyond United? How does this affect your travel plans for this year…any new trips planned? On a scale of 10 to 10, how happy are you are as a Delta elite right now?